Seadrill Limited has reported net income of $127 million, or 26 cents per diluted share, for the fourth-quarter.

However, that was less than half the $272 million it achieved for the same period in 2015.

For the full year the Bermudian-based offshore drilling company made a loss of $111 million, which followed a loss of $635 million in 2015.

At the end of December, the company’s net interest bearing debt was $8.47 billion.

Seadrill is facing challenges with debt restructuring arrangements and has warned that, should it miss a deadline at the end of April, it has contingency plans that could include filing for bankruptcy protection.

Last year, the company reduced its global workforce by a quarter as part of a cost reduction programme.

In the fourth-quarter, Seadrill achieved operating income of $118 million, and underlying net income of $111 with earnings per share of 24 cents. That beat the Zacks Consensus Estimate of 13 cents per share.

Per Wullf, chief executive officer of Seadrill Management Ltd, said: “We continue to see an improvement in the level of bidding activity following the increase and stabilisation of oil prices.

“Improving day rates will not be a feature of 2017, however, based on the expected level of scrapping and cold stacking activity we believe there is room for some optimism.

“Our scale and young fleet position us well for the eventual recovery in the industry. Our key stakeholders have demonstrated a desire to be part of a solution to our restructuring requirements with the right structure and terms.”

The company is a deepwater drilling contractor, which provides drilling services to the oil and gas industry. It has a market capitalisation of $908 million.

Last year, Seadrill cut its workforce by 1,724, about 25 per cent, to 5,271, as it reduced its operating costs. It reduced general and administrative expenses by $14 million to $234 million, and expects to achieve a similar sized reduction this year.

Seadrill’s rig and operating costs fell to $1.02 billion from $1.61 billion the previous year.